We’re entering what’s expected to be another tech earnings season, and you can bet that AI will be front and center. And if there’s one company everyone is watching, it’s Nvidia (NVDA).
The chip giant’s shares have risen more than 16% in the past month, and the stock is currently on track to unseat Apple as the largest publicly traded company by market cap.
This jump comes after Nvidia CEO Jensen Huang said that demand for the company’s upcoming Blackwell chip is “insane” during… Interview with CNBC on October 3. Since then, Nvidia shares have risen nearly 18%, to $130. But reports that the Biden administration would cap the number of AI chips that can be shipped to certain countries halted the rally on Tuesday before it regained some ground on Wednesday.
Nvidia’s impressive stock performance and a surge in data center sales over the past year have put the company in a difficult position for its next earnings announcement, which has not yet been officially scheduled.
in The company’s financial statements for the third quarter of 2024Total revenues rose 206% to $18.1 billion, while data center revenues rose a whopping 279% to $14.5 billion. Although Nvidia is not seeing a decline in revenue, its growth will likely slow compared to the same period last year, which could spook investors.
Don’t believe me? Just look at what happened after the company reported second-quarter earnings in August. While the company beat on revenue and earnings per share, with data center revenue increasing 154% year-over-year to $26.3 billion, Nvidia shares fell more than 6% immediately after the announcement. It took more than a month for the company’s stock price to recover.
AI trading hasn’t raised all ships either. Broadcom (AVGO) shares have jumped 59% year to date, outpacing the broader S&P 500 (GSPC), which is up 21%. Qualcomm (QCOM) shares rose 19% and AMD (AMD) added just 6% to its stock price. Meanwhile, Intel (INTC) shares fell a staggering 55%.
Broadcom benefits from its involvement in AI infrastructure, server interconnection and the like, while Qualcomm is seen as a potential beneficiary of the growth of on-device AI across smartphones and AI-enabled PCs. AMD faces off against Nvidia and acts as an alternative in terms of price and availability.
Then there’s Intel, which is struggling amid its massive transformation efforts that include building out its third-party chip manufacturing capabilities as well as trying to catch up with Nvidia and AMD in the AI processor space.
But Nvidia is still the hands-on star of the show this earnings season. Investors will be looking for signs of continued AI spending from hyperscale companies like Microsoft (MSFT), Google (GOOG, GOOGL), Meta (META), and Amazon (AMZN), which make up a significant portion of AI sales, to understand what’s going on. About how well Nvidia chips sell.
They will also look at how other chip companies fared in the quarter before Nvidia’s announcement, which tends to be much later in the earnings cycle than its contemporaries.
Likewise, Wall Street will be looking for information about Nvidia’s Blackwell offering and whether the company faces any supply constraints as it did with its Hopper chips. Either way, it’s going to be a tough few weeks. Fasten your seat belt.
Email Daniel Howley at dhowley@yahoofinance.com. Follow him on Twitter at @Daniel Holly.
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